Feds Aggressive Rate Cut Fuels Soft Landing Hopes, Asian Stocks Rally

Asian stocks and US equity futures rose due to the Federal Reserve`s decision to cut interest rates by half a percentage point, a move interpreted as a step towards a soft landing for the US economy. While Treasury yields increased on expectations of fewer future cuts, the Fed Chair cautioned against assuming a series of large cuts, indicating that rates may remain higher than pre-pandemic levels. The Fed`s action, considered proactive in supporting the economy, has strengthened predictions of a soft landing, with most experts believing a recession will be avoided. This sentiment is expected to bolster the dollar in the short term. The rate cut, the first in over four years, is projected to be followed by further reductions this year. The Fed`s approach aims to mitigate the risk of a downturn by initiating cuts while the economy remains strong.